Posts Tagged ‘Arbitron’

Nashville, Tennessee, has just become the 44th market nationally to adopt Arbitron’s Portable People Meter (PPM) for measuring radio listenership. Considering the readings taken by the device in other markets, it is not surprising that people in Nashville are bracing for a change in the distribution of advertising funds.

“It’s going to shake up the ratings and how stations are perceived by advertisers,” said Dennis Gwiazdon, president of the Nashville Area Radio Organization and vice president and general manager of South Central Media, which owns Mix 92.9 (WJXA-FM) and 96.3 JACK-FM (WCJK-FM).

“It’s definitely going to force the programming departments to be more judicious in what they play on the air.”

There is certainly precedent for this stance. Just take a look at the numbers produced for The Sean Hannity Show, which experienced a 20% drop in ratings across multiple markets after the introduction of the PPM. The Tennessean article details several more examples of a similar nature:

In Detroit, Breakfast Club morning show hosts Kevin O’Neill and Lisa Barry found themselves without a job in April when the Clear Channel-owned WNIC-FM switched to a music intensive format after PPM ratings showed the formerly No. 1 morning show was coming in at No. 11 among 35- to 64-year-old

A sample audience of 754 Nashville residents put on their PPMs and began collecting data a few days ago. The results will be compiled and previewed by advertisers and station managers in August and then released to the public in October.

Every quarter, Arbitron releases its RADAR report on national listening habits and trends. Of course, the high points are usually released as teasers for the full report, which is what this post is all about.

The initial numbers shared by Arbitron are indicative of some serious Radar Love! Don’t take my word for it though; here is what RadioInk had to say:

Radio reaches more than 239 million people 12 and older in the course of a typical week, reports Arbitron, citing its upcoming RADAR 104 network-radio ratings. Listening to the more than 7,200 RADAR-affiliated stations is at 219 million in a typical week, up from 212 million a year ago in RADAR 100.

Leaps like that are great for whetting the industry appetite for the full and detailed report coming on March 22. It is also always good to have fresh numbers to show to those who continue to deny radio’s relevance. For instance, I am quite sure we will see these stats brought up in Congress during the debates surrounding the Performance Rights Act (PRA), although probably not by the Recording Industry Association of America (RIAA).

Arbitron says that despite the popularity of MP3 players, mobile devices and Internet radio, radio reaches about 93 percent of Americans weekly. “Even 91 percent of the youngest radio audience, teens aged 12–17, who are most accustomed to using new technologies and forms of media, continue to tune in each week.”

Notice that this is “in spite of” mobile and Internet radio, areas that traditional radio has been expanding into with leaps and bounds. Factor those in and radio is a no brainer. Especially in this economy, it is a must for one’s marketing mix.

NOTE: RADAR, the standard for national network radio ratings, measures 51 radio networks operated by: American Urban Radio Networks, Citadel Media Networks, Crystal Media Networks, Dial Global Inc., Premiere Radio Networkss, United Stations Radio Networks and Westwood One Radio Networks.

Arbitron’s Personal People Meter (PPM) is one of the most controversial and embattled pieces of measurement technology that I know of. Touted at its introduction as the wave of the future for measuring radio listenership and audience demographics, its accuracy has been consistently challenged since its introduction. It has been the subject of civil lawsuits against Arbitron by the attorney generals of New York, New Jersey and Maryland. It has also been the subject of both FCC and Congressional hearings concerning its accuracy, particularly in the realm of minority broadcasters.

Minority broadcasters are so concerned about the PPM that in 2008 they formed their own lobbying group, The PPM Coalition, composed of the Spanish Broadcasting Sytem, Entravision, Univision Radio, ICBC Broadcast Holdings, Border Media Holdings, the National Association of Black Owned Broadcasters, the Minority Media and Telecommunications Council, the Spanish Radio Association, and the Association of Hispanic Advertising Agencies.

Now the conflict over Arbitron’s sampling methodologies is ramping up yet again in the form of a court battle brewing between the ratings agency and PPM Coalition member The Spanish Broadcasting System (SBS). Eric Sass at Media Daily News reports:

SBS signed a contract with Arbitron for radio audience measurement by PPM, a passive electronic measurement device, in June 2007, including a requirement that SBS encode its audio signals so they can be measured by PPM. [Note: this was before the minority sampling controversy began. –GW]

SBS then pushed for a credit from Arbitron based on a contractual clause concerning minimum audience sample sizes. Arbitron refused and SBS stopped paying. The battle was now fully joined. Sass continues:

On Feb.4, SBS stopped encoding its audio signals in New York, Miami, Chicago, L.A. and San Francisco. On Feb. 11, Arbitron responded by obtained a restraining order from the New York State Supreme Court requiring SBS to begin encoding for PPM again. At a second hearing on Feb. 16, the court confirmed that SBS must continue encoding for PPM measurement, at least for the time being.

Looks like rocky client relations if you ask me. Now that things have entered the courtroom, the fur is beginning to fly. SBS is challenging the legality of their prior Arbitron contracts stating that they had the PPM measurement system forced upon them with no assurance of accuracy or quality. At the same time, the PPM Coalition is pushing the FCC to open an inquiry into the PPM.

Arbitron has a good bit at stake here if the SBS wins and no longer have to encode for the PPM that removes a large chunk of data from the Arbitron reports, devaluing the PPM data as a whole. In the meantime, Nielsen is still pushing into the American radio measurement industry and each bit of bad publicity for Arbitron is a boon to their expanding efforts.

Looks like it’s going to be one heck of a year in the measurement industry! Stay tuned!

Metrics are crucial to those of us in the radio industry. In commercial radio, your revenue stream is ad revenue and ad buys are based on metrics.

It was, therefore, a major item of interest Monday when the CEO of Arbitron, who provide ratings data for a large percentage of American radio and advertising concerns, suddenly resigned without any forewarning. Immediately in the wake of this event, questions were raised about the veracity of his recent testimony before Congress. Paul Farhi, a staff writer at The Washington Post, reports:

[Michael P.] Skarzynski’s resignation comes six weeks after he testified about the PPM system in a hearing before a congressional subcommittee. The panel’s chairman, Rep. Edolphus Towns (D-N.Y.), said Monday that Skarzynski may have “intentionally misled” the panel. Congressional sources said that the resignation was related to Skarzynski’s testimony and that subcommittee staff members were reviewing the transcript.

Arbitron has had a rather rough year or two. While their new Portable People Meter (PPM) system has been embattled on several fronts, the economic recession hit, and just at a time when they were increasing their prices. On top of that, Nielsen, long at the top in the TV metrics field, has been diving into the radio metrics end of the pool. As a matter of fact, Nielsen has already taken two major clients away from Arbitron in several markets: Cumulus and Clear Channel.

[William] Kerr has been on Arbitron’s board since 2007 and has chaired the board at Meredith — which publishes magazines and other special-interest publications and operates local TV stations — since 2006, having served on its board since 1994. He was Meredith’s CEO from 1996-2007 and before that was president/COO.

On the good side, it seems as though Kerr is a set of able hands in just the right place and time. No matter the real reason for Skarzynski’s departure, its abrupt nature will be sure to make waves. It would behoove all radio concerns to keep an eye on how this situation develops over the course of 2010.

Arbitron, Dial-Global, Premiere Radio Networks, and Westwood One are joining forces. The new collaborative initiative is geared towards improving how radio is used in Marketing Mix Models, which are used by advertisers to see how product sales are driven by differing forms of media.

The initiative is designed to help radio claim a larger share of marketing spend, according to Arbitron. The groups involved say the project will ensure that best practices and available data are employed when determining the value of radio to an advertiser’s potential investment, allowing advertisers to understand the link between radio and product sales.

“Premiere fully supports this long-awaited effort to improve the metrics and tools for understanding, planning and executing audio campaigns,” said Charlie Rahilly, president of the newly created National Advertising Platforms Group of Clear Channel Radio. “We’ve always known from our clients that the medium has worked. Through this initiative, we have a terrific opportunity to validate that statistically.”

More detail in the data is always a good thing. With 236 million people per week listening to radio (as reported by Radio Ink Magazine) the medium obviously retains is long-standing leverage, better and more granular statistics supporting that are needed for the modern advertising market. The establishment of best practices in gathering and analyzing that data is essential for those numbers to carry any meaning.

The four companies will be funding the initiative while they also work with leading marketing Mix companies on using the information generated to fine tune their media analysis. Every step we take in this direction is a good one. The more data we have to work with the better. The impact and effectiveness of radio are often downplayed in certain quarters, nothing combats that sort of talk better than hard numbers.

As Arbitron’s RADAR 103 report prepares for public dissemination on December 14th, we are already getting tidbits of info from it. The same Radio Ink article listed above notes on the weekly reach of radio programming: “That’s 92.5 percent of people 12+, and includes 90 percent of 12 to 17-year-olds.” That’s the big picture. Now it’s time for this new initiative to provide the detailed info supporting the effectiveness of that reach.

Move over, TV, step aside newspapers, and look out, Internet — radio has you all beat!

Even more astounding is the fact that both Nielsen and Arbitron agree on that, at least according to studies release by both companies this week. Arbitron released their study at the opening of this year’s National Association of Broadcasters (NAB) Show, starting the event off on a high note.

Arbitron released its annual Radio Today study at the NAB Radio Show today, and says the study confirmed that more than 90 percent of consumers 12 and older listen to the radio every week — greater penetration than TV, magazines, newspapers, or the Internet.

Now, for those who are somewhat skeptical of Arbitron findings (see the Personal People Meter (PPM) controversies), Nielsen has produced similar findings. Those findings show a huge and underestimated rate of listenership amongst the “iPod generation.”

Nielsen reports that 18- to 34-year-olds in the 51 markets monitored listen to the radio 21.5 hours each week. That’s in line with all people age 12 and older, the company said. It’s a lovely thing to report in their first set of findings since entering the radio metrics arena. The numbers are based on a survey performed last March and April among 119,000 consumers representing a population of 14 million.

FMQB, a radio industry news website, brings us the industry response to the numbers presented:

“By measuring the listening habits of 98 percent of the population instead of the 65 percent that we have been getting, Nielsen has dispelled many of the harmful untruths that have plagued our medium among the ad buying community,” stated Cumulus Radio COO Lew Dickey. “Most notable is the notion that radio has lost its hipness and relevance among younger audiences. Nielsen’s data proves that this is clearly not the case and it will clearly lead to a stronger appreciation of radio over time.”

In an era when naysayers continue to denigrate the medium, radio once more proves that it not only retains relevance but also popularity. It just goes to prove what I’ve said from the start: the radio industry suffers a perception problem, not a viability problem.

So why should we consider these stats to be accurate, especially in light of the unexpected jump in percentages? Up until now, radio surveys have skipped over cell phone-only homes. This effectively removes the younger, more Internet and technology oriented consumers out of the calculations. In Nielsen’s survey, they make up 15% of the total sampling. A 15% that tunes in to radio even more than the 18 – 34 year old demographic at 23 hours per week.

That’s right. In the 12 and over age bracket, there are 235 million people tuning in to radio each and every week. Monday, Arbitron will be releasing its RADAR® 101 National Radio Listening Report with all of the fine details, but in the meantime they have given us a taste of what is to come.

This year’s report is the first to make use of Arbitron’s Portable People Meter (PPM) for harvesting information, and it seems to show that radio has a much longer reach than previously thought. As a matter of fact, that is one of the first statements made in the current media release on Arbitron’s website:

As additional radio markets transition to electronic measurement, total radio reach is revealed to be larger than in previous surveys. Listening to RADAR Network Affiliate stations has also risen year over year. Over the course of a typical week, more than 213 million persons age 12 and older tune to the more than 7,700 RADAR Network Affiliated stations, up from 210 million listeners one year ago in RADAR 97.

There is lots of other encouraging data they’ve shared as well.

Radio reaches 92% of persons 12+ each week, not too shabby in light of the rise of mp3 players and Internet radio.

89 % of the youngest radio audience (12-17 years old) tune in each week. Since this is the demographic most used to new and alternative media, this finding shows radio’s continuing relevance to the tech-oriented younger generations.

Network radio also reaches almost 85% of adults 18-34, “the ad elusive and media multi-taskers.”

92% of black non-Hispanics and 93% of Hispanics 12 and older tune to radio in a given week.

Radio reaches about 93% of black non-Hispanics and Hispanics age 18–49.

Radio reaches more than 94% of college graduates ages 25–54 with a college degree and an annual income of $50,000 or more.

Network affiliated stations reach nearly 86% of college graduates ages 18-49 with a household income of $75,000 or more. (All radio stations reach close to 94%) of this age group.

I would say that this is great news across the board! The ubiquitous nature of radio has never really been in question, but it is always nice to hard numbers that verify that reach. Granted that the jury is still out on the how accurate the PPM system is, I still believe that these numbers both encouraging and worth examining. Since Nielsen is now competing with Arbitron in the radio metrics area, I will be most curious to see how their research compares once they release some.

It is no secret that cell phones, smartphones in particular, are the new frontier for radio. The ability to reach an audience that is always “on the go” through their cell phones is one of the recognized importance — just Google around a bit if you don’t believe me.

Like with all incarnations of radio (and all media in general, for that matter), once you’ve figured out a way to reach the new demographic the next hurdle to overcome is audience measurement. Recently Arbiton unveiled a new approach to harvesting data thanks to a deal reached with Telular Corporation, a leading wireless communications company.

Using fixed cellular terminals produced by Telular, Arbitron plans to collect listening info from those who lack landlines, particularly the “millennials.” By connecting these terminals to Arbitron’s Portable People Meter (PPM) the company hopes to obtain a cost-effective and reliable way to transmit audience measurement data across cell networks.

“Telular’s terminals allow us to cost-effectively use the latest wireless technology to collect radio ratings data from the hard-to-reach mobile-exclusive demographics,” said Beth Webb, Vice President, Research, Arbitron. “The Terminals are helping us increase participation among the young and ethnic radio listeners who live in cell-phone-only households.”

Telular’s fixed cellular solutions bridge the gap between analog and digital communications, providing continuous connectivity to locations where a traditional phone line has been disrupted, removed or non-existent. […] This wireless solution will act as a connection in homes with no landlines, allowing Arbitron to quickly and efficiently download information gathered by the PPMs.

“It’s exciting to see companies like Arbitron using innovative technology to reach households that have chosen to cut their telephone line, either to save money or because cell phones are all they need,” said Joe Beatty, President and CEO of Telular.

As part of the aforementioned mobile-exclusive demographic I am pleased to see efforts like these. Gathering accurate info is always of paramount importance, and the cell phone-only home is becoming more common every day.

According to Arbitron, things seem to be rosy for Salt Lake City, UT, this holiday season. It seems that the area has broken into the big time as far as radio markets are concerned. I’ll allow Lynn Arave of the Deseret News to be the one to break the news since he is a Utah local:

The Salt Lake radio market has hit the top 30 mark.

Arbitron, the company that ranks radio listening, recently rated the Salt Lake market as the nation’s 30th largest radio area. Arbitron ranks more than 300 U.S. radio markets based on total population.

Not bad at all, and news that I am sure advertisers will be paying attention to as well. While New York, LA, and the windy city of Chicago maintain their positions as numbers one, two and three, the “Crossroads of the West” is moving into their elevated echelons. That’s quite the holiday gift for the broadcasters there.

On an interesting side note, Mr. Arave’s article also includes some amusing “local color” tidbits about the 30th largest radio market in the US. My two favorites are the DJ covered in duct tape and the community complaints about holiday music hitting the airwaves the day after Halloween. Take a glance; it’s a short piece.

Nielsen, which has until now only been involved in radio ratings overseas is entering the game in 2009 with some high profile partnerships. Both Cumulus Media and Clear Channel Communications have announced that they will begin using Nielsen in a number of small- to mid-sized markets.

Until now, Nielsen has been known primarily for delivering television ratings, although outside the U.S. they have been involved with measuring radio ratings for some time. This move will be putting the company into direct competition with Arbitron, who so far has had a hammerlock on the stateside market.

Both Cumulus and Clear Channel will continue to utilize Arbitron in their larger markets, at least for now.

Nielsen’s radio service will use address-based sampling to recruit sample households, rather than listed phone numbers, which had been the usual method.

The advantage of address-based sampling is that it will cover the 34% of U.S. households not always covered by current sampling procedures, including homes where the residents only use a cell phone, or where landline numbers are unlisted.

The Nielsen radio-ratings system also includes a “significant investment” in oversampling, and other ways to improve response rates among hard-to-reach demographics, such as young listeners and minorities.

An “e-diary” option for 2010 designed to have more appeal to younger listeners that are more accustomed to participating in online surveys.

It will bear watching to see if this announcement exacerbates the decline of Arbitron stocks, which have been steadily slipping for awhile now. [Stock Chart Here] The debut of Nielsen’s new system signals a new area of competition for the embattled Arbitron, and with the reputation that Nielsen has built over the decades from their work with TV. I am willing to bet it becomes more and more of an issue for them as time passes.

This should be an interesting year coming up, especially once we reach the third quarter of 2009 when the Nielsen markets go live. Since advertising rates are based on the audience share reported by these rating systems, it is of paramount importance to the industry to be able to report accurate data. With a significant portion of advertisers wary due to the erratic and down trending nature of the current economy, being able to assure them that their message is being heard is key to bringing in that revenue.

I get the distinct feeling that as time goes by we shall see a growing clash between Arbitron and Nielsen as Nielsen grows it efforts stateside. According to Mr. Wilkerson’s article, Arbitron has already stated that they have several new measures in the works in addition to the Portable People Meter.